layaway

10 Ways to Tidy Up Your Finances Before the Holidays

Mikey Rox — Wed, 04 Oct 2017 08:30:12 +0000

Summer is over. This fall, fortify your finances to take the end of the year in stride. These helpful tips will get you back on track (and help you stay on track) budget-wise.

1. Start your holiday shopping now

Instead of making a mad rush for last-minute deals, spread out your gift buying over the course of the next couple months. Watch your local circulars and emails for discounts and promo codes, and strike while the proverbial iron seems hot.

For instance, I just purchased several packs of Calvin Klein undies as a Christmas gift for my boo because I received an email for 25 percent off, plus I had an additional 15 percent off coupon with free shipping. Will there be steeper discounts in the near future? I can't be sure, but I had enough savings stacked up to feel like I made a smart choice, and now I can check one more gift off my list.

2. Max out retirement plan contributions

If you haven't already — and your budget can tolerate it — try to max out your 401(k) and 403(b) contributions at work. The employee contribution limit for 2017 is $18,000, and if you haven't reached that, it's time to come as close as you can. Those over age 50 can contribute an additional $6,000 as a catch-up contribution. If your employer offers matching funds, this should be a top financial priority, lest you fail to claim thousands of dollars in free money.

3. Take advantage of layaway

Layaway has had its up and downs over the years. What was once a common practice during the Great Depression started to fall out of favor by the 1980s thanks to the rising popularity of credit cards. Walmart all but left the service for dead in 2006 when it announced it would stop offering it, but by 2012, many retailers were back on the layaway bandwagon to make buying easier on customers in a tumultuous economy. (See also: Is Layaway Still Worth It?)

Personally, I loved layaway in my early 20s when I was on a shoestring budget. It allowed me to plan ahead and make scheduled payments so everything would be ready to go by Christmas. It's certainly a helpful buying tactic to look into if your finances are tight but you still want to participate in gift giving.

3. Use or lose flexible spending dollars

If you're lucky enough to have a flexible spending account through your employer, your FSA may need to be spent by year's end. Try to use up the balance so you're not losing cash. In doing so, you'll free up funds elsewhere that you don't have to use on medical needs.

"Since 2013, your employer may offer one of two carry-over options," says Ryan McPherson, founder of the financial planning firm Intelligent Worth in Atlanta, Georgia. "One — roll up to $500 of unused funds into the following year or two, offer a two-and-a-half month grace period during which you may use your unspent FSA balance. Check with your employer, because offering one of these options is not a requirement. If you don't have either of these carry-over options and expect to have money left in your FSA, try to move appointments and medical/dental-related purchases (i.e., eye glasses or contacts) into 2017."

If you're unsure where your FSA funds apply, IRS publication 502 offers guidance on what counts as a "qualified medical expense." (See also: 8 Ways to Spend Your Last-Minute Health Care FSA Funds)

4. Make a gift list and check it twice

I use to get in this mindset — especially when I started making a little more money — that everybody needed a gift. That logic is false. Everybody doesn't need a gift for the sake of giving them a gift. Now, I make a list of the usual suspects with whom I exchange — immediate family, boyfriend, a few friends — but even then I give it a second glance to see where I can make cuts. Will I see this aunt or that buddy this year? If the answer is no, decide whether a gift is necessary at all to put some more money back in your pocket. (See also: 9 Gifts That Won't Become Clutter)

5. Revise your winter budget

Everything about winter costs more than other times of the year, and you should prepare by revising your budget to make sure all bases are covered.

"In addition to holiday expenses, as the weather gets colder, heating costs also increase," says Roslyn Lash, an accredited financial counselor. "It's imperative that you also set some money aside for inclement weather expenses. Unfortunately, when ice/snow is the forecast, schools typically close, and this could mean paying someone to baby-sit the kiddos. It could also prevent you from going to work, which means lost revenue." (See also: 5 Big Winter Expenses That Could Freeze Your Budget)

6. Determine what's necessary for the holidays and cut back from there

I love all things holiday — the decorations, the parties, the gifts, the endless array of baked goods — and if I'm not participating in someone else's festivities, I'm hosting my own. Of course that can get expensive, so I take a one-year-on, one-year-off approach to the latter part of that equation. Two years ago I hosted a holiday party in my home, but last year I didn't. I bought more holiday decorations for the house last year, but this year I won't. This practice not only helps me save money, but it also lets me cycle through things that I need to get rid of in a timely manner (like half-full bottles of liquor, for instance) and cut down on overall holiday clutter. (See also: Avoid These 5 Common Holiday Budget Pitfalls)

7. Get into a cash back state of mind

Upfront coupons and savings are great, but there's plenty more to be had on the back end if you know where to look. Apps like Ibotta and Fetch Rewards provide cash back on purchases made on preset items or at selected retailers. Last month I scored more than $50 cash back (which was on top of other savings I received on the front end) by shopping through Ibotta.

If you're responsible at managing credit, now's also a great time to take advantage of a cash back credit card on your day to day purchases. By using a cash back card on necessities like groceries or gas, you'll earn cash to bolster your budget. Just be sure to pay off your balance in full every month, or else this method isn't worth it. (See also: 11 Ways Your Credit Card Will Save You Money While Holiday Shopping)

8. Rebid your insurance policies

You may be able to shave some money off your bills this fall by reviewing your insurance coverage.

Michael Landsberg, CFP and founder of Landsberg Bennett Private Wealth Management in Punta Gorda, Florida, recommends rebidding your auto and home insurance policies to at least three independent agents (but not the online ones that are all owned by the same companies).

"Often times, this rebidding process puts hundreds if not thousands back in people's pockets right before the holidays," he explains. "It's very easy. Just take your current policy declaration page and send that to an independent agent and let them do the work. The worst that can happen is you find out you've got a good program in place already."

9. Book travel before demand pricing kicks in

If you're traveling this fall or holiday season, book your mode of transportation and accommodations as soon as possible so you're not looking at ultra expensive rates at the last minute. Hotels and rental cars in particular go fast, and they're subject to on-demand pricing, which means your wallet could end up getting walloped if you're not shut out altogether. (See also: Do These 9 Things Now to Make Holiday Air Travel Easier)

10. Investigate a balance transfer

If you're carrying a high balance on a credit card, now is a great time to give yourself a credit card checkup.

"Explore what's out there," advises Han Chang, co-founder of InvestmentZen. "Many lenders are beginning to offer deals now to get a jump on the holidays. Consolidating credit card debt via a balance transfer can be pretty enticing, especially with those 0 percent introductory APR offers, which usually last for six to 12 months. If you can find a good offer, you could potentially pay down a significant amount of debt before November and December."

But nothing is ever free; offers like this often come with a one-time balance transfer fee ranging from 3 percent to 10 percent of the total balance transfer. That can really add up and, if you're not careful, completely negate any savings that 0 percent APR offers. Be sure to make your payments on time. (See also: Is a Balance Transfer Offer a Good Deal?)

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Smart Money Moves to Make Before the Holiday Season Begins

Tim Lemke — Mon, 03 Oct 2016 09:00:05 +0000

Fall is in full swing, and before you know it you'll be battling the throngs during holiday shopping season.

It may be make or break for many retailers, but it can also be challenging for consumers if they don't do a little bit of planning. Making just a handful of minor financial and lifestyle moves before Christmas and other winter holidays hit can save you money and aggravation later.

Here are nine tips for getting yourself straightened out before the holiday rush.

1. Push Money Into a Savings Account

If you want to avoid racking up more credit card debt, it will help to have some cash set aside to pay for holiday gifts. Consider using an online savings account and making an automatic transfer from your usual checking account each month until the end of November. Even $100 a month saved between now and Thanksgiving will give you $200 (plus a little bit of interest) to spend.

2. Check the Sales Now

We all know about Black Friday sales, but the reality is that stores place deep discounts on items throughout the year. There's no guarantee that a particular product will be at its cheapest on the day after Thanksgiving or any other day leading up to Christmas. Remember that many stores will roll out Veterans Day and Columbus Day sales, and you may find great deals on clothing at the end of summer when stores are looking to unload inventory and bring in fall and winter items.

3. Pay Off Your Credit Cards

Holiday shopping can be a debt creator. The National Foundation for Credit Counseling reported last year that there is a 25% spike in the number of people seeking help with credit card bills in January and February. If you are already paying the minimums on cards or have high debt, the addition of holiday shopping bills can be crippling.

High debt can leave you at risk of maxing out credit limits. At the very least, your ratio of debt to available credit could rise, thus hurting your credit score. Pay down your current debts now, so that any new debt won't be adding to an existing problem.

4. Find Stores With Layaway

For people who want to avoid credit card debt, layaway can be a great option for holiday shopping. With layaway, you can put an item aside at the store and receive it only when it is totally paid for. Many stores offer layaway months before the holidays, so you can select items now and have them paid off in time. Walmart this year began offering layaway on September 2. Kmart has eight-week and 12-week layaway plans now, and Toys R Us has 90-day layaway contracts. One caveat: Some stores do charge fees for layaway services, so be sure to read the fine print before signing up.

5. Track Down Any Money Owed to You

Have you been diligent about seeking reimbursement for work-related expenses? Have you received all money you've earned from freelance work? Now is the time to assess what outstanding cash is due to you. If money is tight, this could help you afford the gifts you want this holiday season.

6. Max Out Your Retirement Accounts

If you have access to retirement accounts, try to put as much money in them now as you can. You can contribute as much as $18,000 annually into a 401K plan and $5,500 into an IRA. The closer you get to these limits, the better off you'll be in retirement. You have until Tax Day next year to max out these accounts, but it may be best to contribute generously now before holiday expenses hit.

7. Make Sure Your W-4 Is Up to Date

If you work for a company, you probably filled out a W-4 form when you were hired. This form tells the IRS how much in taxes to withhold from your paycheck. But it often needs to be updated, particularly when you have gotten married, added a child to the family, or had a significant change in household income. Now is the time to check your W-4 to see that you aren't paying too much or too little in taxes.

8. Do Some Tax Loss Harvesting

If you sold shares of stock at any point during the year, you may be on the hook for capital gains taxes. But you may be able to avoid a tax bill by selling other shares of stock at a loss. In essence, the loss may outweigh the gains. There's nothing wrong with taking the proceeds from a sale and investing right back into the market, as long as you're not investing in the exact same securities. It might make sense to do some tax loss harvesting now, before the holiday rush hits and you forget.

9. Get Your Cars in for Servicing

Wait, what do your cars have to do with the holiday season? Well, car repairs are often a big source of unexpected expenses. And the last thing you want is hundreds or even thousands of dollars in bills right when you're doing the holiday shopping. Get your car in now, and you'll avoid a hefty expense later. Moreover, you'll be less likely to have the car breakdown in unpleasant, winter weather.

This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Is Layaway Still Worth It?

Tim Lemke — Wed, 30 Mar 2016 09:00:12 +0000

A shopping payment option that was popular decades ago has made a comeback in recent years, as some customers have shied away from the use of credit cards.

The downturn in the economy several years back sent some shoppers looking to layaway as an alternative, especially during the holiday season. Under layaway, shoppers can set an item aside and pay for it over time; they only get to take the item home after it's paid for in full. While many stores phased out layaway in the 1990s, it's made a return at many major retailers including Walmart, Kmart, and Toys R Us.

Layaway is often seen as a more responsible way to pay for big-ticket items and for when budgets are tight. But what are the positives and negatives of layaway?

1. PRO: You Don't Need a Credit Card

Some may see this as a downside to layaway, but it is a hugely positive thing for people who are looking to avoid racking up credit card debt, or otherwise can't or won't use a credit card. By using layaway, you can set an item aside, save for it, then acquire it when you have the cash in full. So you get the item and avoid debt in the process.

2. PRO: You Can Lock in High-Demand Items Early

During the holiday season especially, there are certain items that always fly off the shelves. By putting something on layaway in advance of the holiday season, you can guarantee you'll have it.

3. PRO: Almost Anyone Can Do It

In most cases, you can sign up for layaway without a credit check. All you need is some form of identification to prove you're over 18, and a down payment for the items you want to buy.

4. CON: You Can't Use Layaway for Many Products

Stores make their own determination as to what products are available through layaway. Often, very popular products are restricted, and there are often minimum dollar limits. In this way, layaway is more limiting than credit cards, which can be used to buy almost anything.

5. CON: Fees

By using layaway, you avoid potential interest payments from your credit card, but there are still expenses. Many stores charge $5 or more just to sign a layaway contract, and you may have to pay $10 or more if you change your mind and decide not to buy the item. You may also incur additional fees if you don't make payments in a timely fashion.

6. CON: It's Not Offered All the Time

Last year, Walmart only offered layaway from August 28 to December 14, to service the holiday shopping season. Other stores offer it during the holidays and the spring, but not year round.

7. CON: There Are Payment Terms

Layaway isn't quite as simple as setting aside an item and getting it when you pay for it in full. Most stores still expect you to make payments according to a schedule. Kmart, for instance, offers only eight or 12-week contracts and requires payments every two weeks. Toys R Us offers only 90-day contracts, with 40% of the total price of an item due within 30 days and 70% of the item paid for within 60 days.

8. PRO or CON: You're Locked Into the Price

If you put an item on layaway and the price drops, you can't change the terms of the layaway contract to pay less. The only way around it is to cancel the purchase — mostly likely incurring a fee in the process — and buy the item elsewhere. On the flipside, you can lock in a price on layaway if you believe a product may shoot up in price at some point.

Have you ever purchased on layaway?

This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: 2012 Holiday Layaway Plans Explained

Ashley Jacobs — Fri, 19 Oct 2012 10:00:35 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some great articles on 2012 holiday layaway plans explained, making traveling a priority on a limited budget, and when to haggle.

The Lowdown On Layaway

Julie Rains — Tue, 18 Nov 2008 15:47:34 +0000

Layaway never completely disappeared from the retail landscape but it’s become more prominent with promotions by some national chains and locally-owned shops. Instead of paying for merchandise in full with paper (cash, check) or plastic (credit card, debit card), you enter into an agreement to pay over time, taking possession of an item after you have finished paying. From a financial-discipline and delayed-gratification perspective, layaway is a great concept. Here are questions to ask to make sure a layaway program makes sense for you.

The big question for me is:

Does the store stock this item on a regular basis and if I wait until I have saved the money to pay for it, will it still be available? (If the merchandise would still be around or if I could find a better deal later, I might save my money and buy later).

You might ask the store or online layaway provider:

If the item goes on sale before I finish paying for it, will I pay the full retail price or the discounted sale price?
If I change my mind about the purchase, will all my money be refunded or will I receive a store credit?
Are there fees or other charges associated with the layaway program?
How often do I need to make payments?
Will I lose my deposit and money I’ve paid toward the item if I miss a payment?
Will my item be taken out of inventory and set aside?
Where will my item be stored?

Several years ago, I bought a suit for work by using layaway with a local shop, making payments of irregular amounts when I could (usually every payday); when the balance was paid in full, I took the suit home. Having had problems finding professional clothing in my size (when I was living in a small town in the days before online shopping), I wanted to go ahead and claim the clothes, then pay. Many layaway programs now require paying the full amount within 90 days or less, rather than making payments in an indeterminate time frame.

The gotta-have-it-now approach to shopping and (prior) access to credit are typically mentioned as the reasons for the decline in layaway’s popularity. But, for the retailer, these programs can be time-consuming to administer, require valuable sales floor or backroom space for storage, and reduce the amount of cash available to invest in new inventory, all of which impact profitability. "Same as cash" programs were more attractive from a merchant's perspective and even for some consumers (warning: if you miss the payment deadline, interest is often calculated on the entire purchase amount and not the outstanding balance). Slower sales activity, tighter credit, and consumer preference may have led to a new interest in the pay-first, take-it-home-later programs.

Still, consider if the retailer has the policy, processes, and systems in place to make sure the layaway deal works for you. Get the policy in writing, document payments, and follow the program guidelines. This guide from the FTC gives consumers an idea of what a well-managed layaway program should look like. Checking around my area, I see that bike shops and jewelry stores are offering layaway as well as national retailers, such as Kmart, Sears (recently announced return of layaway), Burlington Coat Factory, and Goody's. There are also online layaway programs offered through eLayaway and Lay-Away.com. (See links for policies.)

An alternative to layaway is to save in a regular savings account and then buy. You can earn interest while you save and have the no-fee option of changing your mind; however, the item you want to buy may no longer be available.

This article is from Julie Rains of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

layaway

10 Ways to Tidy Up Your Finances Before the Holidays

1. Start your holiday shopping now

2. Max out retirement plan contributions

3. Take advantage of layaway

3. Use or lose flexible spending dollars

4. Make a gift list and check it twice

5. Revise your winter budget

6. Determine what's necessary for the holidays and cut back from there

7. Get into a cash back state of mind

8. Rebid your insurance policies

9. Book travel before demand pricing kicks in

10. Investigate a balance transfer

Like this article? Pin it!

9 Smart Money Moves to Make Before the Holiday Season Begins

1. Push Money Into a Savings Account

2. Check the Sales Now

3. Pay Off Your Credit Cards

4. Find Stores With Layaway

5. Track Down Any Money Owed to You

6. Max Out Your Retirement Accounts

7. Make Sure Your W-4 Is Up to Date

8. Do Some Tax Loss Harvesting

9. Get Your Cars in for Servicing

Is Layaway Still Worth It?

1. PRO: You Don't Need a Credit Card

2. PRO: You Can Lock in High-Demand Items Early

3. PRO: Almost Anyone Can Do It

4. CON: You Can't Use Layaway for Many Products

5. CON: Fees

6. CON: It's Not Offered All the Time

7. CON: There Are Payment Terms

8. PRO or CON: You're Locked Into the Price

Best Money Tips: 2012 Holiday Layaway Plans Explained

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The Lowdown On Layaway